The Three Best Stocks To Play Platinum's Turnaround

However, the same can’t be said for the “other” precious metals, platinum and palladium.

A quick look at the year over year performance in the sector and you’ll see what I mean:

While gold and silver prices plummeted, prices are actually up for the “other” precious metals, platinum and palladium. But as you know, if you’ve been investing in the field, there’s much more to the story…
Unfortunately for investors, no matter which metal in the list above you picked, the share prices of most precious metal miners have been trending lower.

Sky-rocketing costs, mine strikes, nationalization worries – you name it and precious metal miners, in the past year, have seen it.

That said, there’s a change a’ brewing.

We’re set to see a rebound in precious metal shares, starting with platinum producers.

Why Platinum? Why Now?

Here’s an important takeaway that you have to consider.

In a down market, gold producers, for example, aren’t just hit hard with the fallout in the price per ounce of gold.

Goldcorp for example is one of the world’s largest gold miners – and down over 25% year over year. But what many folks don’t realize is that the company is also one of the world’s largest silver miners.

So not only is the company hurt with the plummeting price of gold. Their main bi-product, silver, is hurting even worse! It’s a one-two punch to the gut for many gold miners.

And the way that gold and silver prices have been acting lately (on the trading screen) – I don’t see a vertical recovery in the cards. For gold, we’re still clawing our way above support at $1,200. To build a solid foundation the market simply needs more time. Same goes for silver.

However, platinum is an altogether different story.

Sure, it’s been a tough year for platinum producers – what, with South African strikes, Zimbawe’s mine grab, and a general slump in precious metals. But when it comes to prices for the ore they produce, platinum miners are much better off than gold miners.

Platinum has been trading sideways since early 2010. There’s three years of support for current prices above $1,400 – and a breakout is in the cards.

There’s something else that bodes well for platinum miners…

Not only is the price of platinum up 5% year over year, the main bi-product for many platinum producers, palladium, is up 25% during that same period. A quick look at the palladium chart and you can see a much stronger uptrend than the other three precious metals. Indeed, palladium prices are primed for a breakout.

Add it all up and platinum miners look strong these days.

Better yet, the chart for platinum producers is telling the same tale.

Today there’s a bottom appearing in the price of platinum producers. Take a look at the chart action for two of the top platinum miners, Anglo American Platinum (AGPPY) and Impala Platinum (IMPUY):

The worst may be over for the platinum players above.

Anglo American Platinum is the world’s foremost platinum miner. Anglo produces over 2.3 million ounces of platinum per year and over 1.3 million ounces of palladium, so any rise in platinum and palladium prices would easily increase their bottom line.

Impala Platinum Holdings, with its low-cost Two Rivers mine as a highlight is the world’s lowest-cost major platinum producer. Last year the company produced over 800,000 ounces.

With the worst behind them, both of these miners appear poised for a move higher.

Same goes for a third miner, Aquarius Platinum (AQPTY.)

Over the past two years Aquarius has proven to be the platinum growth story. Just in the past 12 months alone, Aquarius production grew nearly 25%. Currently production is over 325,000 ounces.

Unlike the two big players listed above, the chart for Aquarius is slightly different – year over year prices are up 16%. However, you can see a similar bottoming pattern from a recent pullback – so a leg higher is also primed and ready.

And just to give you a little more color on the Aquarius story, in 2008 shares traded over $32 apiece. Today the share price is closer to $1.50. That’d be one heckuva comeback play, eh?

All said, I like platinum producers today. Now’s your chance to buy the bottom in the “other” precious metal.

About Matt Insley:

Matt Insley is the managing editor of The Daily Resource Hunter and now the co-editor of Outstanding Investments. Matt is the Agora Financial in-house specialist on commodities and natural resources. He holds a degree from the University of Maryland with a double major in Business and Environmental Economics. Although always familiar with the financial markets, his main area of expertise stems from his background in the Agricultural and Natural Resources (AGNR) department. Over the past years he’s stayed well ahead of the curve with forward thinking ideas in both resource stocks and hard commodities. Insley’s commentary has been featured by MarketWatch.